EIGHTH AMENDMENT TO CREDIT AGREEMENT
THIS EIGHTH AMENDMENT TO CREDIT AGREEMENT dated as of December 29, 2000
(the "AMENDMENT"), is among Alternative Resources Corporation, a Delaware
corporation, the undersigned Lenders and American National Bank and Trust
Company of Chicago, as Agent and as a Lender. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings ascribed to them in the
Credit Agreement (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and the Lenders entered into that
certain Credit Agreement dated as of November 7, 1997 as heretofore amended (as
so amended and as the same may hereafter be amended, modified, restated or
otherwise supplemented from time to time, the "CREDIT AGREEMENT");
WHEREAS, the Borrower, Agent and the Lenders wish to make certain
amendments to the Credit Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, each of the undersigned agrees as
follows:
1. AMENDMENTS TO CREDIT AGREEMENT.
(a) The definitions of "Cash Budget", "Facility Termination Date"
and "Permitted Overadvance" contained in Article I of the Credit Agreement shall
be amended in their entirety and as so amended shall read as follows:
"Cash Budget" means the consolidated cash forecast dated
August 28, 2000 for the Borrower and its Subsidiaries for the period
from August 28, 2000 through December 30,2000, or any updated or
replacement consolidated cash forecasts delivered by the Borrower to
the Agent, in each case acceptable to the Agent and the Required
Lenders.
"Facility Termination Date" means May 4, 2001 or any earlier
date on which the Aggregate Commitment is reduced to zero or otherwise
terminated pursuant to the terms hereof.
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"Permitted Overadvance" means, as of any date of determination
thereof, the difference between (a) the amount set forth below for such
date:
DURING THE PERIOD: PERMITTED OVERADVANCE:
------------------ ----------------------
The period ending December 30,2000 $12,000,000
December 31, 2000 through January 30, 2001 9,500,000
January 31, 2001 through February 27, 2001 9,500,000
February 28, 2001 through March 30, 2001 9,000,000
March 31, 2001 through April 29, 2001 8,000,000
April 30, 2001 and all times thereafter 7,000,000
less (b) 100% of the amount of all income tax refunds to the extent the
same exceed $2,124,000 received by the Borrower after December 1, 2000
(with any reduction in the Permitted Overadvance on account of any such
income tax refund to be effective as of the date of receipt thereof).
(b) Section 2.6 of the Credit Agreement shall be amended by
adding a new subsection (c) at the end thereof which reads as follows:
"(c) The Borrower agrees to pay to the Agent for the account
of the Lenders a sixth amendment fee in an amount equal to $550,000,
such fee to be fully earned upon execution of the Sixth Amendment to
Credit Agreement by the Borrower and Lenders and delivery of the same
to the Agent and to be payable as follows: 50% of such fee (i.e.
$275,000) payable upon execution and delivery of the Eighth Amendment
to Credit Agreement by Borrower and Lenders (the Borrower hereby
directs the Agent to charge the Borrower's account maintained with ANB
in payment of such fee) and the balance of such fee to be payable upon
the earlier of (a) payment of the Obligations in full and termination
of the Commitments, (b) May 4, 2001 or (c) acceleration of the
Obligations pursuant to Section 8.1 hereof.
(c) Section 2.6 of the Credit Agreement shall be amended by
adding a new subsection (d) at the end thereof which reads as follows:
"(d) The Borrower agrees to pay to the Agent for the account
of the Lenders an eighth amendment fee in an amount equal to 1/2% of
the Aggregate Commitment in effect on the Eighth Amendment Effective
Date, such fee to be fully earned upon execution of the Eighth
Amendment to Credit Agreement by the Borrower and Lenders and delivery
of the same to Agent and to be payable on the earlier of (a) payment of
the obligations in full and termination of the Commitments, (b) May 4,
2001 or (c) acceleration of the Obligations pursuant to Section 8.1
hereof; PROVIDED HOWEVER, that in the event payment of the Obligations
is made in full and the Commitments are terminated in their entirety
prior to May 4, 2001, then 50% of such fee shall be forgiven."
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(d) Section 6.1(ii) shall be amended in its entirety and as so
amended shall read as follows:
"(ii) As soon as available and in any event within 30 days
after the end of each month in each year, for itself and its
Subsidiaries (a) consolidated profit and loss and reconciliation of
surplus statements and a statement of cash flows for the period from
the beginning of such fiscal year to the end of such month and (b) a
report of branch office openings and closings, in each case
satisfactory to the Agent and the Required Lenders all certified by its
chief financial officer."
(e) Section 6.24.4 of the Credit Agreement shall be amended in
its entirety and as so amended shall read as follows:
"6.24.4 CUMULATIVE CONSOLIDATED EBITDA. The Borrower will have
Consolidated EBITDA for the periods commencing January 1, 2001 and
ending each of the dates specified below in an amount not less than
that specified below for such period:
FOR THE PERIOD COMMENCING CONSOLIDATED EBITDA SHALL
1/1/01 AND ENDING: NOT BE LESS THAN:
----------------------------------- --------------------------
January 31, 2001 $500,000
February 28, 2001 1,000,000
March 31, 2001 2,300,000
April 30, 2001 3,400,000"
(f) Section 6.16 of the Credit Agreement shall be amended in its
entirety and as so amended shall read as follows:
"6.16 CUMULATIVE CAPITAL EXPENDITURES. The Borrower will not,
nor will it permit any Subsidiary to, expend or commit to expend, on a
cumulative basis for Capital Expenditures in an aggregate amount for
Borrower and its Subsidiaries in excess of:
FOR THE PERIOD COMMENCING CAPITAL EXPENDITURES SHALL
1/1/01 AND ENDING: NOT EXCEED:
----------------------------------- --------------------------
January 31, 2001 $200,000
February 28, 2001 400,000
March 31, 2001 650,000
April 30, 2001 875,000"
(g) Section 6.17 of the Credit Agreement shall be amended by
deleting "$8,500,000 appearing therein and by substituting $4,500,000".
(h) Section 6.23 shall be amended in its entirety and as
so amended shall read as
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follows:
"6.2.3 FINANCIAL CONTRACTS. The Borrower will not, nor will
it permit any Subsidiary to, enter into or remain liable upon any
Financial Contract."
(i) Section 6.32 shall be amended in its entirety and as so
amended shall read as follows:
"The Borrower agrees to continue to retain Xxxx Xxxxx (or
another reputable financial advisor) to enhance its capital structure
and cause such financial advisor to issue periodic (but no less
frequently than monthly) progress reports to the Lenders. Additionally,
the Borrower will continue to diligently pursue a refinancing of its
Obligations hereunder and will keep the Agent apprised of any
meaningful progress in connection therewith and the Borrower agrees to
participate in bimonthly conference calls with the Agent and the
Lenders in which the Borrower and its financial advisors if appropriate
or requested by the Agent or any Lender, gives status reports on the
Borrower's operating performance and strategic plans."
(j) Section 6.33 of the Credit Agreement shall be amended in its
entirety and as so amended shall read as follows:
"6.33 The Borrower agrees to continue to cooperate with, and
pay the fees and expenses of, Xxxxxxxx & Xxxxx LLC within ten Business
Days of receipt of an invoice showing in reasonable detail and
description the amounts thereof.
2. RELEASE.
In consideration for the agreement of the Agent and the Lenders to this
Amendment, Borrower hereby releases and forever discharges Agent, each Lender,
each of their parent corporations, affiliated corporations, subsidiary
corporations, predecessor corporations and successor corporations, and the past
and present officers, directors, agents, assigns, subrogees, servants,
employees, financial advisors and attorneys of each of them from any and all
claims, actions, causes of action, choses in action and suits of every kind and
nature whatsoever, whether at law or in equity, under any facts or legal theory
that Borrower ever had, now has, or hereafter can, shall or may have, in any way
related to, arising out of or based upon this Agreement, the Credit Agreement or
any Loan Document, except for any such claims arising out of Agent's or any
Lender's future willful breach of this Agreement.
3. REPRESENTATIONS.
In order to induce the Lenders to execute and deliver this Amendment,
the Borrower hereby represents to the Lenders that as of the date hereof, the
representations and warranties set
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forth in Article 5 of the Credit Agreement are and shall be and remain true and
correct (except that the representations contained in Section 5.4 shall be
deemed to refer to the most recent financial statements of the Borrower
delivered to the Lenders) and the Borrower is in compliance with all of the
terms and conditions of the Credit Agreement after giving effect to the
amendments and waivers contemplated hereby and no Unmatured Default or Default
has occurred and is continuing under the Credit Agreement or shall result after
giving effect to this Amendment.
4. CONDITIONS PRECEDENT. This effectiveness of this Amendment shall be
subject to the satisfaction of all of the following conditions:
(a) CERTAIN DOCUMENTS. Agent shall have received this Amendment
duly executed by the Borrower and
the Lenders.
(b) RESOLUTIONS AND SECRETARY'S CERTIFICATE. Agent shall have
received certified copies of resolutions of the Board of Directors of the
Borrower authorizing the execution, delivery and performance by the Borrower of
this Amendment and a certificate of the Secretary or Assistant Secretary of the
Borrower certifying the names of the officer(s) of the Borrower authorized to
execute this Amendment, together with a sample of the true signature of each
such officer;
(c) GOOD STANDING CERTIFICATE. The Agent shall have received a
certificate, dated as of a date not more than 10 days prior to the date hereof,
of the appropriate official(s) of the States of Delaware and Illinois,
certifying as to the subsistence in good standing of the Borrower in such
states.
(d) OPINION OF COUNSEL. Agent shall have received an opinion of
counsel to the Borrower with respect to this Amendment, addressed to the Agent
and Lenders, which opinion shall be satisfactory to Agent and the Lenders.
(e) NO DEFAULT. After giving effect to this Amendment and the
waivers contained herein, no Unmatured Default or Default shall have occurred
and be continuing or will result from the execution and delivery of, or the
performance by Borrower of any of its obligations under this Amendment.
(f) GUARANTORS CONSENT. The Guarantors shall have consented
hereto in the space provided for such purpose below.
5. MISCELLANEOUS.
(a) This Amendment shall become effective upon the execution and
delivery hereof to the Agent by the Borrower and the Lenders and the
satisfaction of the conditions precedent set forth in Section 4 hereof.
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(b) The Borrower acknowledges and agrees that pursuant to Section
6.1(xi) of the Credit Agreement, the Agent has requested the Borrower to prepare
and submit by January 11, 2001 an updated Cash Budget for the period commencing
January 1, 2001 through the Facility Termination Date and the Borrower further
acknowledges and agrees that the failure to submit the same shall constitute a
Default under the Credit Agreement.
(c) Except as specifically amended herein, the Credit Agreement
shall continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in any note, document,
letter, certificate, the Credit Agreement itself, any Guaranty, any Collateral
Documents, the Notes, any other Loan Document or any communication issued or
made pursuant to or with respect to the Credit Agreement, any reference in any
of such to the Credit Agreement being sufficient to refer to the same as amended
hereby.
(d) The Borrower agrees to pay on demand all costs and expenses of
or incurred by the Agent in connection with the negotiation, preparation,
execution and delivery of this Amendment, including the reasonable fees and
expenses of counsel for the Agent, such payment to be made no later than 30 days
following receipt of an invoice showing in reasonable detail and description the
amounts therefor.
(e) This Amendment may be executed in any number of counterparts,
and by the different parties on different counterparts, all of which taken
together shall constitute one and the same agreement. Any of the parties hereto
may execute this Amendment by signing any such counterpart and each of such
counterparts shall for all purposes be deemed to be an original. This Amendment
shall be governed by the internal laws of the State of Illinois.
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IN WITNESS WHEREOF, this Amendment has been duly executed by each of the
undersigned as of the day and year first set forth above.
ALTERNATIVE RESOURCES CORPORATION
By:__________________________________
Name:________________________________
Its:_________________________________
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO, as Agent and
individually as a Lender
By:__________________________________
Name:________________________________
Its:_________________________________
MELLON BANK, N.A.
By:__________________________________
Name:________________________________
Its:_________________________________
XXXXXX TRUST AND SAVINGS BANK
By:__________________________________
Name:________________________________
Its:_________________________________
FLEET NATIONAL BANK
By:__________________________________
Name:________________________________
Its:_________________________________
NATIONAL CITY BANK
By:__________________________________
Name:________________________________
Its:_________________________________
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GUARANTORS' CONSENT
The undersigned have each heretofore executed and delivered to the
Agent and the Lenders a Guaranty and each hereby consent to the Eighth Amendment
set forth above and confirm that its Guaranty and all of the undersigned's
obligations thereunder remain in full force and effect in accordance with its
terms.
ARC SOLUTIONS, INC.
(formerly known as CGI Systems, Inc.)
By:__________________________________
Name:________________________________
Its:_________________________________
ARC SERVICE, INC.
By:__________________________________
Name:________________________________
Its:_________________________________
WRITERS, INC.
By:__________________________________
Name:________________________________
Its:_________________________________
ARC MIDHOLDING, INC.
(formerly known as CGI Corp.)
By:__________________________________
Name:________________________________
Its:_________________________________
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